New York – New York State Attorney General Eric Schneiderman on Monday launched an investigation into post-Sandy price gouging after receiving hundreds of complaints from consumers across the state.
Subscribe to our Daily Roundup Email
Schneiderman said his office has received complaints from consumers from areas of the state hit hardest when the massive storm struck one week ago – New York City, the Hudson Valley and Long Island.
The largest number of complaints are related to increased gasoline prices, he said in a statement, but consumers also have reported possible gouging for emergency supplies like generators, hotels raising rates due to “high demand,” as well as increased prices for food and water.
Let him first investigate the
President and the
Mayor and
FEMA also the
Red Cross
Can someone enlighten me please.
Are there price controls on all comodities?
If I want to sell an item can’t I charge the most possible?
Contrary to popular belief, price-gouging is GOOD in times of disaster. And government efforts to stop it hurt the very people who need help the most.
Allow me to explain.
Suppose a disaster caused a shortage in the supply of gas. Now not everyone who wants gas can get it. In other words, gas now has to be rationed.
There are two ways this can happen:
1. the decreased supply and steady demand cause the price to rise. as a result, only those who desperately need the gas will purchase it. Yes, they will pay more, but if they need it enough they will be happy for the opportunity to get it in the first place.
Furthermore, the chance for a quick profit will cause people to shift supplies from non-disaster areas to disaster areas as much and as quickly as possible, leading to the slow-but-steady increase in supply and thus slowly returning prices to normal.
The other way to deal with is what has been actually happening: price controls. The result? shortages.
Instead of those who need it most getting the gas – it goes to those who were first in line.
The crack down on price gouging also discourages people from shifting supplies to where it is most needed.
Gouging is also against Halacha, and doubtless ignores numerous mussar precepts.
But those who engage in such behavior aren’t thinking in those terms, and have many justifications and rationalizations for their actions.
Everyone knows that it’s said that if the fish merchants demanded too high a price, then the rabbonim banned the eating of fish on Shabbos. They didn’t say that people should pay whatever the market will bear.
They’re struggling mightily with these issues in Eretz Yisroel where some neighborhoods are trying to enact rent controls.
All the counter arguments can be summed up quite simply. “Hey, it’s not my fault that the only way I can make a living is against Halacha and immoral. (And BTW, in times of a disaster, very possibly illegal) Let all those poor shlubs who can’t afford it go somewhere else.”
And to the poster above who posited an economic justification for price gouging so as to increase supply: Are you serious? I mean, really? I’ve been all around NYC, Rockland, NJ and Long Island during this crisis. Stores are stocked to the best of their ability, with more goods arriving daily, if not hourly, where there’s infrastructure to receive them. Do you think Target or Walmart could restock any faster even if they wanted to? You’re just trying to rationalize…
Why didn’t one of you get two semis full of generators to Lakewood last week? The fact is that the guy who did, and who charged like four times his cost, did a service. Venal, sure, but nobody’s perfect. And nobody made anyone buy those generators, and none of you goody goodys had the seichel or gumption to do it either, only to kvetch afterwards..
So basically you have two sides to this issue. There are those who say it is “better” for economics to dictate price, completely ignoring morality. And those who say government should step in (in its stumble footed way) and attempt to impose some fairness. The third path (as I mentioned above) is from our Mesorah, which I (although I’m not a Rav or a Talmid Chacham) believe gives some flexibility on price while being sensitive to the overall needs of the public.
There’s a legitimate overarching need for the common people to be able to procure necessary goods ands services at reasonable prices. There’s no societal need or benefit for a vendor to charge obscenely inflated prices in times of crisis. ($8 gal for gas? $1000 or more for a service call from a plumber or electrician or repairman? Why not if people will pay it? Oh you NEED something more? Tough!)
And just to reiterate, despite the economic theories tendered above, in practice there is no shortage of people looking to sell stuff in areas affected by the storm, even at plain old regular prices.